Amidst the uncertainty surrounding the broader global economy, Dubai remains one of the few bright spots for real estate investors.
Historically, we have seen that high oil prices are also boosting sentiment.
In addition, the city's continued investment in its innovation ecosystem is continuing to create more jobs and attract more people to the city.
In the third quarter of 2022, Dubai's real estate market witnessed its highest performance in a quarter in 12 years.
The latest figures on Monday showed that 25,456 sales were registered, compared to 15,744 in the third quarter of 2021, a significant increase of 61.69 percent year-on-year.
Each month of the third quarter recorded the highest volume in a decade, according to Property Finder's latest quarterly report, Property Finder Market Watch.
"The real estate industry achieved a unique footprint by leapfrogging the 2013 market peak thanks to an outstanding third quarter of 2022.
To date, the market has crossed the market peak with a 13 percent increase, and there is still room to increase in the fourth quarter of this year to record the highest annual performance in a decade," the report said.
"Growth is coming from both primary and secondary real estate. Most of the growth came from cash transactions, not mortgage transactions," Caswani said.
New visa policies, such as the expansion of the Golden Visa program, as well as Green and Freelance visas, also boosted sales of off-plan properties, with 11,735 sales transactions in the third quarter.
The market grew by 74% year-on-year and 30% compared to the second quarter of 2022, which is considered to be the best performance of the off-plan market in a decade.
The existing market saw 13,721 transactions in the third quarter of 2022 and witnessed a 52 percent year-over-year increase, the second highest quarterly performance for the secondary market in the past decade.
While condominium values increased by nearly 9 percent, villa prices recorded a nearly 18 percent increase during the quarter, the report said.
The third quarter recorded the highest market value for a quarter in the past decade.
The value of registered sales reached approximately Dhs70 billion compared to Dhs42 billion in the third quarter of 2021, up 66% year-on-year and 18% sequentially.
Secondary market transactions accounted for 65% of total sales transactions in Q3 2022, compared to 69% in Q2 2022, with the share of off-plan transactions increasing to 35%, compared to 31% in Q2.
The value of off-plan property sales increased by 85% year-on-year and 32% sequentially to Dhs24.46 billion, compared to Dhs13.25 billion in Q3 2021, reaching a new high value for a quarter in the last decade.
The current peak is not just in the off-plan market, as the value of sales in the secondary market increased by 57% compared to Q3 2021 and 11.5% compared to Q2 2022, reaching the highest quarterly value in the secondary market in a decade.
In the rental market, the momentum over the past year shows little sign of slowing as the number of contracts on the market increased by an average of 13% compared to the second quarter of 2022.
The average market value increased by 20%, supported by contract renewals, which witnessed an increase of approximately 16% on a quarterly basis.
Average rents for apartments rose by approximately 7% over the second quarter. In comparison, rents for villas increased by 11% during the period.
It expects rents to "remain high" for the rest of the year, but growth is expected to slow amidst an oversupply of units.
Property prices have risen sharply to become more expensive due to an increase in the expatriate population and construction costs, in addition to interest rates, which increased by around 3% during 2022 and are expected to increase in the future.
With the UAE dirham pegged to the US dollar, the value of the currency is now much higher. In addition to this, prices are also rising.
So, these two together are putting a lot of pressure on the affordability of housing. You'll see this affect both the rental market and the ownership market.
